Blue Owl Capital (OWL) investor relations material

Industry evolution and business models

• Alternative asset management has evolved from direct lending to a broader set of strategies, including asset-based lending, digital infrastructure, and GP stakes, with a focus on capital solutions and downside protection.

• Growth has been primarily organic, with acquisitions serving as platforms for further expansion, especially in real assets.

• Both leading firms operate capital-light, fee-driven models, prioritizing high margins, cash flow, and dividends over balance sheet-intensive strategies.

• Scale is a key competitive advantage, enabling access to larger deals, better origination, and more diversified portfolios.

• Diversification and disciplined credit standards underpin portfolio resilience, with hundreds of positions and significant equity cushions.

Market dynamics, volatility, and performance

• Volatility is viewed as an opportunity, allowing deployment into higher-quality assets at better spreads, with permanent capital providing flexibility.

• Despite tight spreads and high valuations, robust origination teams and careful deployment mitigate risks of capital inflows overwhelming investment opportunities.

• Direct lending and asset-based lending portfolios have low default rates and strong recoveries, with software lending highlighted as a top-performing, low-risk segment.

• Asset-based lending and digital infrastructure are seen as the next growth frontiers, with larger addressable markets and higher barriers to entry.

• The industry is maturing, with established leaders expected to maintain their positions, especially as scale and performance become more critical.

Industry perception, education, and future outlook

• Persistent negative narratives and skepticism about private credit are attributed to misinformation, lack of education, and competitive interests.

• Industry leaders emphasize the need for better communication and continued demonstration of strong results to shift perceptions.

• Private credit is not a new concept; its resilience has been proven through multiple crises, including the pandemic and financial downturns.

• Macro outlook remains positive, with expectations of steady growth, manageable inflation, and a favorable environment for credit strategies.

• The wealth channel and alternative credit are areas with ongoing evolution, but the top firms are likely to remain dominant over the next decade.